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I was having the same issue. Found a resolution here (see sqldoc's comments):
http://social.msdn.microsoft.com/Forums/en-US/sqldatabaseengine/thread/60c939e9-d19b-49d2-9f46-2b71b89e7c1d/?ffpr=0
June 1, 2009 at 11:04 am
#1002921